Is it best to start with the smallest autotrading program available?

In general, we believe it is best to start with the program(s) that will best fit your needs and your risk tolerance. When autotrading, the larger programs provide the best diversification and risk-adjusted returns (i.e. may be less volatile and easier when starting out). A simple way to compare the risk-adjusted returns between programs is to use the Sharpe ratio—the higher, the better. This metric is viewable on iQ performance reports and via the iQ Portfolio Builder tool. Another effective way to measure risk is to compare the size of the historical drawdowns relative to the program’s suggested funding levels—the smaller the percentage, the better. By examining these two metrics, you can find the program(s) that may be best suited for pursuing your financial goals.

Is futures trading risky?

All trading and investing carry inherent risk, regardless of the type or trading instrument. InvestiQuant strategies avoid much of the risk by only trading the intraday time frame (~930 am ET to 500 pm ET) and avoiding the less liquid, more volatile overnight session. To be clear, we don’t hold trades overnight, and thereby avoid the risk of unexpected market shifts due to overnight news and geopolitical events. Historically, our strategies have only been active and exposed to market risk about 10% of the time that of stocks - which naturally makes them very lowly correlated and ideal solutions for value-added portfolio diversification. We also include stops with every signal that gets executed, this helps keep risk in check whenever a trade does not work out.

The #1 Red Flag When Buying a Futures Strategy

Extraordinary returns. Tiny drawdowns. Financial freedom on autopilot.

If you’ve researched futures trading, you’ve probably seen the pitches. Before you trust one with your hard-earned capital, ask:

“Were the advertised returns actually earned with real money trading these strategies?”

After two decades of trading futures with our own capital and helping others do the same - including managing investor accounts as a U.S.-regulated commodity trading advisor - we are deeply concerned by how these programs are increasingly promoted.

We believe in systematic futures trading. Properly researched and responsibly used, it can provide powerful diversification and opportunities in rising and falling markets. But a compelling strategy and a compelling sales pitch are very different things.

#1 Red Flag: Hypothetical profits presented as proven returns

A backtest estimates how a strategy could have performed using historical data with specified assumptions. It does not establish that anyone earned those profits - and it does not prove that someone could have achieved similar results in actual trading.

Today’s software and AI tools make it remarkably easy to test countless combinations of trading rules, keep the winners, and display an extraordinary historical track record.

The danger? Rules can fit yesterday’s market beautifully and fail when real money is on the line. In fact, that is the norm, not the exception, for most backtested futures strategies in our experience.

Actual trading also introduces costs and constraints a simulation may underestimate: commissions, worse execution prices, limited liquidity, and the impact of more investors trading the same signals.

Even an independently audited backtest is still hypothetical. An audit does not establish that simulated profits were achievable - or that the strategy is likely to make money going forward.

Backtesting has a legitimate role in research. We use it ourselves. But research is the starting point - not sufficient evidence to entrust someone with your capital.

All investment strategies will deviate from historical returns, so be sure to buy from firms with proven futures expertise - who also risk their capital alongside clients’.

Bottom Line: Never invest in a futures strategy without verifiable live results.

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